Revenue and Profit Continue to Grow as Customer Base Expands
Telecom Plus (LSE:TEP), which operates under the Utility Warehouse brand, delivered another year of growth for the 12 months ended 31 March 2026.
Revenue increased by 5.6% to £1.94 billion, while adjusted pre-tax profit rose 4.7% to £132.2 million. The company also recorded strong customer growth, with total customer numbers rising 23.3% to 1.43 million.
The increase was supported by the acquisition of broadband customers from TalkTalk, which contributed to the expansion of the group’s multi-service customer base.
Shareholder Returns Enhanced Through Dividends and Buybacks
The company increased total shareholder distributions to 100 pence per share and unveiled a new £40 million share repurchase programme.
The buyback forms part of a broader capital allocation framework under which Telecom Plus intends to return at least 80% of adjusted profit after tax to shareholders through a combination of dividends and share repurchases.
Management indicated that buybacks will be used when the company’s shares trade below a predetermined earnings multiple, providing flexibility in how capital is returned to investors.
The policy reflects the board’s confidence in the group’s cash generation and long-term growth prospects.
Partner Network and Cross-Selling Strategy Drive Momentum
Telecom Plus continued to expand its nationwide Partner network, which grew to 77,200 members during the year.
The company also made progress integrating the TalkTalk broadband customer base, creating opportunities to cross-sell additional Utility Warehouse services and increase customer value over time.
Management highlighted ongoing recognition for both value and customer service across its energy and broadband offerings, reinforcing the company’s competitive positioning in the UK household services market.
New Five-Year Plan Targets Significant Customer Growth
Alongside its annual results, Telecom Plus outlined a new five-year investment strategy extending to FY31.
The plan aims to more than double the number of higher-quality multi-service customers to over one million and is centred on four key priorities: enhancing the customer proposition, expanding the Partner channel, increasing national brand awareness and strengthening digital capabilities.
Management believes these initiatives will support sustained growth, deeper customer engagement and stronger long-term earnings quality.
Investment Programme to Weigh on Near-Term Earnings
While the company remains optimistic about its long-term growth trajectory, management acknowledged that increased investment will affect short-term profitability.
As a result, adjusted profit guidance for FY27 has been reduced as the business commits additional resources to support customer acquisition, technology development and brand-building initiatives.
The board believes these investments are necessary to create a larger, more resilient business capable of generating attractive returns over the long term.
Outlook Balances Growth Ambition with Near-Term Challenges
Telecom Plus’s outlook is supported by strong customer growth, an expanding Partner network and a clearly defined long-term strategy.
The company’s investment programme is expected to strengthen its market position and enhance future earnings potential, although it will place pressure on profitability in the near term.
Valuation remains attractive, supported by a strong dividend yield and a shareholder-friendly capital return policy.
While technical indicators have been relatively weak recently, management believes the group’s growth opportunities and recurring revenue model provide a solid foundation for long-term value creation.
More about Telecom Plus
Telecom Plus, which trades as Utility Warehouse, is the UK’s only integrated provider of subscription-based household services.
The company offers a range of essential services, including energy, broadband, mobile and insurance, through a single monthly bill. Its business model combines recurring customer revenues with a nationwide network of independent Partners who promote and distribute Utility Warehouse services.
By bundling multiple household services together, Telecom Plus aims to improve customer retention, increase lifetime value and provide consumers with a convenient and cost-effective alternative to managing multiple providers.
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